Development of China's State-Controlled Firms. the Case of the Consumer Electronics Sector**

By Yang, Hailan; Morgan, Stephen | Management Revue, October 1, 2010 | Go to article overview

Development of China's State-Controlled Firms. the Case of the Consumer Electronics Sector**


Yang, Hailan, Morgan, Stephen, Management Revue


The aim of the paper is to investigate the development of China's state-controlled firms in the consumer electronics sector, where we focus on the evolution of firm business strategy and ownership structure, two aspects of a firm's internal organization crucial for competitive advantage. The Chinese consumer electronics sector is used for the study, partly on the basis of its significance in national economy, but also because its growth experience is typical of many industries in the Chinese economy as a whole. This paper uses case studies to identify the specific characteristics of China's firms that operate in a transitional society undergoing social and economic transformation. It is argued in this paper that there exist different ways of development of China's state-controlled firms with different competitive position.

Key words: development, state-controlled, China, qualitative research

Introduction

China's state-owned enterprises (SOEs) have experienced radical transformation during the transition from a planned economy to a market-oriented economy over the past three decades. At the end of 2009, 1604 large enterprises had become listed firms on the Chinese stock exchanges of Shanghai or Shenzhen (Shanghai Stock Exchange 2009; Shenzhen Stock Exchange 2009). More than 70 percent of the listed firms are state-controlled firms in which the state is the largest shareholder (Securities Daily, 20/12/2009). Although the state owns a majority of the stake, many of statecontrolled firms have been given some market or market-like incentives (World Bank Group 2001). Such newly acquired autonomy and flexibility have motivated the statecontrolled firms to build resources and capabilities to compete.

Development of business strategy and appropriate form of ownership structure are two of the major internal means to achieve the competitive advantage of the firms (Child/Pleister 2003; Filatotchev/Toms 2003). Past empirical studies have largely neglected the link between institutions, business strategy, ownership and firm performance in a transition economy such as China. Changes in these elements may influence the degree of strategic fit between the choices of firms and their external environment An examination of the interaction between various internal and external elements helps enrich our understanding of the processes that influence the growth of the state-controlled firms in China during the transition period.

Our focus on only one industrial sector - the consumer electronics (CE) sector - enables us to minimize the influence of industry and technology on the management attitudes and organizational behavior of the firms. Different industrial sectors will display different characteristics regarding the adoption of market orientation since they operate under different conditions and with varying degrees of government regulations (Deng/Dart 1999). The focus on one industry avoids conflicting conclusions based on the aggregate discussion of various industries.

This study integrates exploitation-exploration framework with the institution theory to propose a dynamic strategic fit of the firms in a transition environment. The formation of a firm's strategies is dependent on the environment in which the firm operates. The matching of strategy and environment can obtain better performance-a poor match can hurt performance (Miller 1988). Business strategy is a necessary but not sufficient condition for performance. Performance is also influenced by the ownership of the firms (Filatotchev/Toms 2003). The appropriate ownership structure is seen as the means to better enable the managers to exploit strategically, firstly the internal resources of the firm, and secondly position the firm to better explore external resources, thus to improve the performance of the firm Qefferson/Su 2006; Thomsen/Pedersen 2000).

Here the following questions are asked: how does the exploitation and exploration construct apply in the China's state-controlled firms in CE sector? …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Development of China's State-Controlled Firms. the Case of the Consumer Electronics Sector**
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.